Strong manufacturing report gives dollar a boost

AP News
Posted: Aug 31, 2011 4:53 PM
Strong manufacturing report gives dollar a boost

A strong report on manufacturing on Wednesday gave the dollar a slight boost ahead of a key U.S. jobs report for August. The Commerce Department said factory orders climbed 2.4 percent in July, the largest increase since March.

Worries that the U.S. may drop back into recession have led some investors to expect that the Federal Reserve could announce a new round of support for the economy as soon as its September meeting. Analysts say a weak U.S. jobs report on Friday could push the Fed to act.

The euro fell to $1.4380 late Wednesday from $1.4447 Tuesday, while the British pound dropped to $1.6244 from $1.6312.

Despite fears about the European debt crisis, the euro remains stronger this year. Trading has been volatile in recent weeks, but the common currency has stuck largely in a range from $1.40 to $1.45.

Fears about the viability of the euro currency union and stagnating growth in the U.S. have strengthened the Swiss franc and Japanese yen as the "safe haven" currencies of choice.

The Swiss and Japanese central banks have both made moves in August to try to curb the gains in their currencies.

On Wednesday, the dollar slipped to 76.60 Japanese yen from 76.72 yen, approaching its post-World War II low of 75.92 yen from earlier this month. The dollar tumbled to 0.8048 Swiss franc from 0.8193 Swiss franc _ still a ways from its record low of 0.7062 struck on Aug. 9. The franc had nearly hit parity against the euro.

Investors had speculated that the Swiss government would try another "very aggressive measure" to curb the gains in the franc at a regularly scheduled meeting Tuesday night, said MF Global analyst Jessica Hoversen. The government did not announce any move.

The Swiss National Bank had earlier this month pumped francs into markets in an effort to weaken the currency.

In other trading Wednesday, the dollar rose to 97.95 Canadian cents from 97.82 cents.